Press Release Archive - 2003

Anglo American plc (“AA plc”) arrives at its headline earnings in respect of De Beers by accounting for the interests arising from the ordinary shares and the 10% preference shares it holds in DB Investments (“DBI”).

AA plc will therefore report headline earnings of US$248 million for the six months ended 30 June 2003 from its investment in DBI, as reconciled in the table below:

Reconciliation of headline earnings for the 6 months ended 30 June 2003

(1) GAAP adjustments relate to mark-to-market adjustments which are recorded in De Beers' earnings, principally the US$70 million in respect of the mark-to-market of interest rate hedging contracts referred to in Dbsa's press release, but which are excluded from AA plc's UK GAAP results, and associated tax effects.

(2) As a result of the De Beers' partial interest in Debswana Diamond Company (Proprietary) Limited (one of the shareholders in DBI), AA plc accounts for an additional 3.65% of DBI's post-tax earnings attributable to ordinary shares.

(3) AA plc grosses up its preference share income to the operating profit level and accounts for its preference share interest in operating profit, exceptional items, investment income and net interest, tax and minorities, in the same way as it accounts for its ordinary share interest in these balances. This treatment is in accordance with FRS9, paragraph 33, which indicates that where preference shares are an integral part of the investor's long-term interest, it is appropriate to include the preference share interest with the ordinary share interest in determining the investor's overall share of an associate's results. The headline earnings attributable to AA plc's US$35 million preference share income are arrived at by adjusting for a proportion of exceptional items (+US$2 million) and goodwill amortisation (+US$8 million) in the same way as the ordinary share interest is calculated.

In the six months ended 30 June 2003, AA plc received from DBI US$56 million dividends on ordinary shares relating to FY 2002 and US$35 million dividends representing the second US$35 million payment on preference shares for 2002. A US$35 million interim dividend on preference shares for 2003 is scheduled for payment on 31 July 2003.

In the six months ended 30 June 2002, AA plc received from DBI US$29 million dividends on ordinary shares and US$42 million dividends on preference shares (representing 7 months of 2001 following the De Beers transaction). A US$35 million interim dividend on preference shares for 2002 was received from DBI during the second half of 2002.

Reconciliation of headline earnings for the 6 months ended 30 June 2002

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